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tv   Your Business  MSNBC  September 19, 2010 7:30am-8:00am EDT

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can you help your own business by turning customers on to your competition? the woman who ran martha stewart's empire on the secrets of selling. and where's the money? we'll tell you about yet another option. that's all coming up next on "your business."
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hi there, everyone. welcome to "your business," where we give you tips and advice to help your business grow. a few months ago we decided to follow a start-up company to see what it really takes to launch and grow a business. not surprisingly, it takes a lot. in june, we introduced you to courtney nichols and gordon, the owner of smarty-pants. when we last met up with them, they got 3,500 pounds of packaging and 700,000 vitamins delivered to their home office. they were having issues with their shopping cart and had to delay the launch of the site. but they were still optimistic and had plenty of funding.
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over the past two months, they've been dealing with this. >> this is something that you don't think about when setting up the home office which is -- is your next door neighbor about to start a year-long construction project that involves drills and nail guns and nonstop banging 24/7 which has been going on for two months. >> and here with us on the set laughing about that is courtney nichols. gordon is joining us from california. so great to see both of you. >> thank you. >> it's good to see you're laughing about this. it hasn't driven that you crazy yet? >> i think it's always easy to laugh about it after the fact. i don't know while it was happening. >> also, you're in new york. gordon, you're the one that is still hearing it. >> yeah, the nail guns. >> tell me what's going on, you guys. i know when you started this, you talked to me. you had all the assumptions about when you would launch, what would happen, how you were
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going to go. is everything holding true to the assumptions? >> well, i would say fair to say like almost every start-up that's not the case. and that was, you know, that was a tripping up point for us. i think when you start really moving fast, you want things to be true that are not true. you don't pay attention to the details. and the details cost you a lot of time down the road. we had technology tripup that's held us up for two months that came out of assumptions. it's our own fault. if we really played close attention, we would have seen the signs earlier. but that's all right. we got through it. >> and gordon, talking about assumptions and things that are going to happen and product changes. i know some of the feedback you got about the vitamin that you distribute is that it looked like there is a lot of sugar on it. how do you deal with that? here's the product you've been working on. you take it out to market and then you're getting this kind of negative feedback about it. >> well, people perceive there is a lot of sugar on it because there is a sugar-coating on it
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to prevent it from sticking together. we told the parents that obviously concerned about sugar intake, as are we. and what we did is we -- we essentially created a bunch of content around why we did what we did, why we chose sugar as opposed to a artificial sweetener, how much sugar is in smarty-pants compared to other things. you use that as an opportunity to reach out to the community and engage. >> that's a perfect example of you took something that could have been bad for your company, i like how you said, you engage with the community. now you have a dialogue with them. >> that's right. and people say it's organic cane sugar. that's a positive message instead of a negative message. it's less than a glass of unsweetened apple juice. but if people didn't give us that feedback, we never would have gotten into the conversation and had an opportunity. now we market it. it's on the front of the bottle, the label, low in sugar. >> so you're out there, marketing it. things are working?
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we'll see you both hopefully again in a few months to see how you're getting from the initial launch to been out there for a little while. >> that's right. thanks so much for coming on the program. we're excited to follow this. >> thanks, j.j. it's one thing to develop a rapport with some of your competitors. but could you ever imagine promoting them or even taking orders for them? one small business owner does all of that and more. she believes entrepreneurs need to open their minds and their hearts to a different way of doing business. >> the key is doing the right things for the right reasons. the fact that we really put ourselves out there. you have to give it back before it's going to come back to you. >> dawn lancaster knows she may not be the typical entrepreneur. she's the owner of the soap and candle carving company, carved solutions in burlington, vermont. she spends much of her time marketing her own brand, she
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also sees promoting others as key to the way she does business. >> it's an amazing feelly. you put yourself out there for somebody else and seeing something great happen for them. >> lancaster's 4-year-old company counts pottery barn and red envelope among the wholesale parters this. their products have even landed in o magazine. >> we hit the december o list. it changed everything. it put us on the map. it gave us a branding that we didn't have. >> that success is something lancaster is willing to share near and far. >> i think we all don't succeed despite ourselves. we all have to lean on somebody. if somebody's not there to open a door for you, to hold your hand, give you advice, you're not going to grow. >> take david glickman. he is the owner of vermont butcher block and board company. he says his professional outlook
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improves. >> if dawn wasn't in my life, my business would be a lot smaller. and we would have probably struggled a little bit more. >> david said, hey, how is the wholesale thing going for you? i said let's go to a trade show, come with me. by presenting him to my clients and new clients as well, he was really able to grow his business. >> since glickman's first trade show, lancaster is a steady presence in his life and he in hers. >> she's a very generous person. >> the world is big enough for all of us. the stronger i make a presence for him, the stronger he makes a presence for me. >> she admits that the relationship works because they're not making the same market. >> if you're in the market for a butcher block, you're not in the market for soap. >> but what if you are looking for soap? lancaster's response may surprise you. she knows other entrepreneurs who sell the same product but she's not afraid to promote them
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either. >> there's enough business to go around. and if we're all growing, then we're all going to be successful. if you hoard something to yourself, it's not going to help anyone. >> meet ellen cagnasola. she is one of lancaster's closest friends and, yes, she's also a competitor. >> we both do personalized soap. >> while her company sweet soaps based in new jersey sells a different kind of soap, both women are targeting some of the same dollars. the pair believes their relationship transcends business. it's something a bit more personal. >> she's a very good friend. i trust her. personally and professionally. we have the same problems. we know the same people. you know, possibly the same customers. >> despite that overlap, both women have no qualms about publicizing each other's businesses. they both promote each other on twitter and even in something with a phone call. >> i have customer that's will
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call me and say hey i need new product in the store. i don't have time to go to trade shows. and i have relationships with people like dawn. i will pass their name and website along. >> lancaster has even taken orders for her company. >> the customer called in. they were specifically looking for personalized soap but they needed a specific price point and experience. and so i said, hey, we can also do a sweet soaps line. >> she just sent me an e-mail. she said give me a price for 400 bars of logo soap. i gave her the price. and i made soap. >> while the pair's working relationship may be puzzling to some -- >> typically it comes from somebody who is outside the industry and aware that's this is what we're doing. they'll comment, boy, you're promoting your competitor. >> the back and forth is actually good business. >> technically, my job is customer satisfaction. that customer has to walk away having received exactly what it was they were looking for. >> it shows that you have more value to your customer that, you
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know, i'm not just this one trick pony that i do this one thing all day long. >> more than anything else, lancaster, glickman and cagnisola hope other entrepreneurs with learn from their situation. >> if you're in a situation where you're closing yourself off from peers or competitors, you're not going to be able to grow. >> it's not all about competition. it's about cooperation. it's about helping -- when one person succeeds, a lot more people succeed. >> there is this new sort of concept of business being gentler and friendlier. >> for lancaster, hanging forward has become a business model of sorts. one, that's paying off in all sorts of ways. >> you are not going to put your hand out. if you're not going to open the door, don't expect somebody else to help you. we love doing that for each other and putting ourselves out there for each other. hugs are great. they're priceless.
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it still teams complicated to promote a competitor. so let's turn to this week's board of directors to get their opinion. rod kurts is the executive editor of aol small business. and steve strauss is the small business columnist at usa today. you can also read his blog at and you can read stuff you write on aol on small business. you're a team. >> good to see you, my friend. >> let's hear what you think about this. it is tricky. sounds like they have different points. the market for personalized soap is not enormous. it's interesting that they are promoting each other. >> you know, when i first started my first business back when i was a lawyer, i had a friend, associate lawyer and he gave me so much help when we started, when i started. he gave me legal advise, business advise. finally i said, dave, rrnt you worried i'll take business from you? he said what we saw on the piece, steve, you know what?
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there is more than enough business for everybody. and a light bulb went off in my head. that is a great philosophy. turned out to be very busy. over the years, i've adopted it. i'm sure we all share references. it works. >> and presumably if you were too busy, you would refer him and vice versa. >> and you see doctors do that, too. you see this in a lot of industries. partnership is the best kind in this rising tide. there is enough to go around. i came to aol in january and we launched aol small business, i started exploring different partnerships that we could pursue. i realized it felt entrepreneurial and similar to your experience. it was so refreshing and so much fun to work with people you like. one of the reasons i love doing the show, it's great working with your team. i think it benefits both of us. i think a lot of entrepreneurs see this. you saw it in the piece. there is enough business to go around. if there is that authenticity behind it, it can be great. >> this is all good and nice and great to promote competitors.
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realistically, when starting out there and you are just dying for one customer, you know, ten customers, whatever it's going to take -- >> that's a challenging time to do it. >> right. >> i also think it helps create good will all the way around. you mentioned referrals. so you're giving referrals and you're also getting referrals. >> all right. thank you. nice conversation. what happens when you combine high end fashion, heart stopping bargains and competitive shopping? you get the e-commerce jugger not which tripled its revenues in one year. the ceo of the guilt group is susan line. she is the former president of disney's abc entertainment and the former ceo of martha stewart living. line sat down with us recently to share her views on how to succeed in business. >> i know this is going to sound strange. but getting fired from abc actually turned out to be one of
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the best things that ever happened to me. because i had gone through a charmed professional life where i went from one job to another just because somebody picked up the phone and said will you do this? and i thought, that's interesting. i think i will. and to finally have some time where i could set back and look at what was happening and media lens and in the marketplace as a whole and to think about what i wanted to do as opposed to what someone else wamented know do because hugely valuable. one of the things i do that i have actually found is highly useful is to have office hours. and what i mean fwha is that anyone in the entire company can book a half hour with me once a week i leave open a two-hour block of time. and i encourage any employee at
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any level of our business to book a half hour with me. and it gives me the ability to understand many parts of our business that i might not be able to spend time in but more importantly, i get a sense of what the mood of the company is. and it's been a fantastic, valuable tool. i think one of the mistakes people make often is to keep your head down too much, to be looking so much at your own business that you're not seeing the shifts that are taking place. and it's just fascinating to me when i look at the marketplace i'm in which is a combination of internet and retail and if you think back five years, it was a completely different landscape. there was no facebook. so there was really no social shopping or for that matter social communication. it's been a transformtive thing.
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and there are plenty of businesses out there that were caught short by it. the minute you say this is what i do and, thus, it will be forever, is when i think a company starts dying. you have to always be able to step back and say okay, is there something more here? what am i not seeing? or has the market changed in the year since i last did this exercise? where are there new opportunities? and constantly rethink what it is that you're actually offering to people. there are always market shifts that are going to change what your business is. still to come, we answer your business questions including one about how to regain the respect of staff and clients when you made an error in judgment. and in today's "where's the money," how lending networks may
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be the answer to your funding needs. ♪ got to give it to me [trumpet playing "reveille" throughout] reviving the economy means
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reinventing the way we do business. here's to the owners showing us the way. [trumpet playing "reveille" fades to silence] you should be checking out peer to peer lending sites. >> i decided to go to one for two reasons, one, proprovide a safety net for me to expand my business. two, i want to start a history with installment loans.
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>> gregory needed a $20,000 loan to grow his web development company. he got the credit but not through his bank and not from credit cards. he borrowed the money from 50 strangers whose names he doesn't even know. >> on average, we have over 100 lenders that will fund each loan. >> john donovan is the chief operating officer of a borrower fills out an application and the lending club instanley accesses the credit information. if the loan is approved, it gets listed on the site. and then anyone can decide to lend the borrower money. >> depending on how fast you type, it would take between five and 0 minut20 minutes to get yo listing out there. and then you have the two-week time period where the sloon live. >> 90% of loans that make it on to the platform get funded by people like carl van ledgy. >> i look at the fica score range to make sure it's a viable risk. i look at the debt to income
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ratio for pretty much the same reason. i also look, again, for sort of a narrative of what they're looking to do with the money which gives me an idea of the thought process and what kind of a business they're looking to start. >> borrowers are asking for capital for projects ranging from buying new equipment to leveling out cash flow. >> gregory said he is grateful for the money that people loaned him. >> i think there is an element there that will be important in this new economy. >> as an entrepreneur, you may feel that it's just easier to do everything yourself. but, look, in the long run that is not the most infective way to run your business. so here are five tasks that you should think about delegating courtesy of >> number one, accounting. unless you have a financial background, consider delegating the responsibilities to a qualified employee or
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bookkeeper. two, i.t. you may have a handle on basic computer issues, but you should have an i.t. professional on call for serious problems. three, social media. this is another task that can be tempting to handle by yourself. but effective social media campaigns require more than just a few minutes here and there. four, hr. you may be the one doing the interviewing and hiring, but leave the training of new employees to your staff. and number five, meetings. try to limit yourself to the most important meetings and have trusted mebdz of your staff bring you up to speed on the you are teen ones. it's time now to answer some of your business questions. the first one comes from shelly. she writes, unfortunately, i have made some bad decisions in the past when running my company. now i feel that my employees don't respect my judgment and don't listen to me. how do i overcome this? >> tough. >> the good news is you can always fire them. >> exactly. >> then you have to start all
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over. >> no. i think, you know, we talk about this a lot. i think there is an aspect of business where you have to be genuine. i was a political science major and nixon and everybody else, it wasn't the crime, it was the cover-up. i think if you come clean, admit your mistakes, if you have enough genuine people on your staff that buy into the broader mission, they're going to say i respect you for being a little humble even as the ceo or boss and they might respond quite well to it. >> really good advice. >> it's like being a parent. you have to set parameters and maybe you make a mistake but everyone has to know you're the boss. literally, they have to know you're the boss. i agree. admit you made a mistake but from then on, set an example and let everyone know, onward we go. >> and we all make mistakes. >> and then you have conversation, individuals with people. if they're doing something, not listening to you where you step in and say basically, i'm the boss. ? >> exactly. you're running a business. you're not there to be their friend. you're there to be their employer and paying them income. and, you know, that carries
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gravitas. that is worth something. >> then if it doesn't work, can you fire them. >> there is always that. >> moving on to the next one. this is a question from the owner of a company with 50 employees. >> what should we expect as managers to be the greatest challenges to grow our business from 50 employees to above 100 employees? and do you have advice on overcoming those challenges? >> here's the good news, going from five to 50 is a lot harder than going from 50 to 100. there are definitely growing pains. my question for him would be why are you worried about growing employees right now? i didn't hear him talk about revenue and what the employees are going to do for him. but the scary part is when you start bringing on all these new people. you may not even know a lot of them very well at this point. things seem to spiral out of control. when you have five employees, you know everything that goes on. >> how do you retain the culture of your company? >> that's exactly what i was going to say. the issue is every small business has a culture. most are by default.
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a couple are by design. what you want to do is have a culture by design. as you get bigger, as you change, as you bring in new people, that culture is not going to necessarily change. your job as a manager is -- as an owner is to have a vision. let people know what that vision s and to the extent possible, keep that familiar feeling. it gets more and morp corporate. >> okay, the next one. this is from the owner of a company that launched a new product but spent most of the money on research & development. >> we have limited resources. and we need the quickest and most direct way to get into the market. >> so the product is this new low-fat beef patty. it's a food product. >> the great news is there is all sorts of issues during the marketsing ideas that you can use n this case, bring in a commissioned sales person. you're not going to pay that person anything until they sell something. maybe it is smiling and dialing. or hitting the concrete yourself f you don't have the money, it's going to take energy. it's going to take one or the
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other. if you don't have the cash, somebody has to put a lot of energy out to get the word out there and get real estate and make sales. >> in terms of that sales person, you want someone that has industry experience, has the contacts you may not have. maybe after all this r & d they have a great product and the product can often sell itself. >> it is someone who will get someone who will work just on commission? >> it's not easy. but this day and age, there are a lot of people looking for work and there are commissioned sales people. >> and that is the upside of this economy. >> yeah, for better, for worse. >> i was going to say with the food company, there are companies able to break into whole foods and bigger chains based on the story. entrepreneurs create stories to tell. >> absolutely. then can you do sampling and you gets the customers. this is the last question we have. rob says i backed up my computer but don't know a good place to keep my backup. any ideas of a sum am good place. you laugh. i must say, i -- i have the same
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question recently. >> i was telling steve, i grew up in a family business. in the early days of computers, my dad would come home with the giant cassette tapes. the same holds true now. keep it in two different places whether it's physically different space. you have services like mosey where can you back it up online. i think it's important to keep it separate. >> maybe that's the idea. keep a backup online and another hard backup in another area. >> and be a little more broad. 25% of all small businesses after some sort of disaster, losing dat why or flood, oar something, don't reopen. you don't want to just back up the data. have physical copies of the most important files. you want to have customer lists, vendor lists. all that stuff. make copies of those. wherever your extra safe place is. >> and where is that extra safe place? >> why not home? >> i keep my hard drive in the sock drawer. i keep it in a separate place. if something happens to it, my computer gets stolen -- >> people used to keep cash under their mattress.
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>> that's right. exactly. now it's your disk. >> thanks so much for all your advice. we really appreciate it. and if any of you out there have a question for our experts, just go to our website. the address is there just hit the ask the show link to submit a question for the panel. again, the website is or e-mail us your questions or comments. how much do you know about the people that visit your company's web page? if the answer is not much, you want to join wufoo. can you collect data on line. there are templates for tasks like lead generation management, customer surveys and even job complications. the site offers a free trial allowing you to test three forms at a time. to learn more about today's show, click on our website, it's
7:58 am you'll find all of today's segments plus web exclusive content with more information to help your business grow. and don't forget to become a fan of the show on facebook. we look forward to getting your feedback. enyou can also follow us on twitter. next week, as part of nbc news' week-long look at education in america, we'll tell you about a program where budding entrepreneurs are getting an education and turning it into cash. >> we're really going to be there with you every step of the way, helping you to get that business up and running. and if that business is not the one that you should get up and running, we'll help you switch to a different business. we'll help you figure it out. >> we'll take you to detroit to find out how one nonprofit is trying to help small business and revitalize the city. until then, remember, we make your business our business.
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[trumpet playing "reveille" throughout] reviving the economy means reinventing the way we do business. here's to the owners showing us the way.
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